Advantages & Disadvantages of owning the SFR

SFR (Single Family Residence): In my opinion, this is the best investment you can add to your portfolio.

ADVANTAGES:
1) You can live in it and enjoy home ownership.
2) You can lease it out to tenants for added income.
3) It can be flipped for a quick profit.
4) It can qualify for a long term capital gain (taxed at 15% if you own it for more than 12 months).
5) You can defer taxes using the IRS's 1031 exchange (I'll explain this in future posts).
6) You can receive TAX FREE profits of up to $500,000 if you're married, and $250,000 if single when the property is sold.
7) It can be left to family when you pass away tax free assuming the Estate falls beneath the Death Tax threshold (I'll explain this in future posts).
8) You can depreciate it....reducing your taxable income and write off all expenses incurred while using the property as a rental.
9) It offers a great return on your investment. The value of Real Estate will more than double every 15 years
10) You can pull money out of a property that is worth more than you owe (a Home Equity Line of Credit or HELOC).

DISADVANTAGES:
1) Maintenance is required to keep your property in good condition.
2) You will have to pay Property Taxes and insurance.
3) If you pick bad tenants, you may need to seek legal assistance to evict.
4) If you have a mortgage, a vacancy can cost you monthly until it's rented out.

There are many more advantages and disadvantages to owning a SFR, but in my opinion, the advantages outweigh the disadvantages.

In my next post, I will go over the advantages & disadvantages of the Multi-Unit property (Duplex, Triplex, etc...)